BEIJING: Chinese Premier Wen Jiabao warned Monday the Chinese economy still faces challenges given the uncertainty in the outside and unbalanced development inside the country. But he expressed confidence China will overcome them.

"The economic situation at home and abroad remains complex, with increased uncertainty in the international market. There are still problems of imbalances and unsustainable development in China's economy," Wen said at a meeting concerning the government's work report.

The country should be aware of and prepared for the coming challenges, he said.

The country will maintain stable macroeconomic policies but also improve their flexibility, he added.

The goals of this year's macroeconomic policy is to balance economic growth, adjust the economic structure and manage inflation expectations, he said.

China beat the global financial crisis with a democratic and scientific approach to decision making, borrowing from experts' wisdom and taking into account citizens' concerns, he said.

This year the government will work harder to realize a democratic and scientific style of decision making, he added.

"We are confident and capable of integrating the wisdom and efforts of experts and fully exploiting the advantages we have," he said.

This year's report will unite the people and raise their confidence, Wen said.

"The world economy is expecting a new round of growth after the economic crisis. We should seize the opportunity and build on the positive momentum of the Chinese economy."

China's economy expanded 8.7 percent in 2009 from a year earlier, exceeding the government's annual growth target of 8 percent. But experts have expressed concern about a rise in inflation.